Reasons Behind Late Payments and Solutions

Reasons Behind Late Payments and Solutions

Purchase on credit is a common practice in Pakistan. No matter the size of your business, people always have that bunch of clients who are used to paying late. Whether it’s a customer who constantly crosses the deadline or that one-timer who completely gets away with it, dealing with these customers can be pretty stressful.

Though it’s not a recommended practice for any business to sell goods on credit, however, sometimes owners get lucky and those one-timers become life-timers. Moreover, there are several examples of businesses that solely run from trade on credit. 

 

Reasons Why Customers Pay Late

 

Low Priority

  • You probably won’t like it, but you may not be your customers’ first priority. Same as you do with your business, your customers value their debts according to how significant they are to their work. If your product/service ranks low, you’ll get paid last.

 

  • Sometimes there’s a simple explanation for pushing deadlines – like a dysfunctional finance department. Despite your repeated reminders to collect payments, they simply don’t have any knowledge, when it’s due, or where it’s supposed to go.

 

Lack of Urgency

  • Extreme leniency with a customer can drive a lack of urgency. Sometimes, they might take you for granted and feel like they can get away with it. They know that the consequences are minor and would rather settle other debts that have negative outcomes.

 

 Tough Times

  • This is one of the troublesome moments when you realize you can’t do a lot to force them into paying. Your customer is going through a difficult time where sales have reached the bottom and they don’t have resources to pay you. 

 

Here’s How You Deal With It

Understanding the reason behind late payments is only the first step towards achieving a resolution. Once you recognize where customers are coming from, you’ll be able to make better choices for your business.

 

State Your Terms Up Front

Consistent on-time payments start with setting clear conditions on the front end. Before you start any project, the client should exactly know the cost, when the payment is due, and what happens in case of a breach.

By clearly mentioning the terms and getting the customers to agree to them, you minimize the chances of excuses. After all, it’s much difficult for a client to feign ignorance when there was a clear conversation about the issue.

 

Personalize the Follow Up

 Any type of follow up is better than no follow-up, but be careful when sending automated emails or phone calls to clients. While they prove to be a decent reminder to the customers, they don’t do much in terms of provoking urgency. By personalizing the follow-ups, you make sure they know that there’s a face behind the late invoice and encourage them to step up and make the run for it.

 

A Little Help From Technology

You can go take the harder way or you can think about it and work smart. There is a possibility that you keep on sending automated emails and phone calls to your customers and they still don’t respond. Maybe these emails are the reason this matter loses its urgency or becomes less important to clients. 

The easiest solution for me is a mobile application that keeps records of all your transactions and sends auto-reminders to customers to pay their debts. These aren’t just auto-reminders, you can customize your message with a little bit of love and simplicity and send it to your clients without any hassle. You won’t even know it and would get your payback even before the deadline. One such app is the Udhaar app.

Udhaar app is an online ledger (like an online khata or journal) to record your outstanding debt, and send auto-reminders to customers to fasten Udhaar collection. It’s your business’ personal Khatabook that holds every little information about your transactions. Udhaar is an easy, safe, and reliable app with amazing features like reporting, multi-language support, data backup, offline mode, and many, many more. 

 

  

 

How to Organize Business Paperwork?

There are a lot of troubles that come with being a business owner or running an organization. Managing and organizing business paperwork – seemingly easy tasks –  shouldn’t be one one of them or shouldn’t be there at all.

Several entrepreneurs find themselves shackled with documents. These can be contracts, financial statements, spreadsheets, reports, employment applications and records, insurance policies, invoices – you name it. From the important to the minuscule, the paperwork clutter seems never-ending.

Bringing some management to your important documents can give you increased clarity about what’s in the drawer, what’s in the trash (and what’s missing) and a greater supervision over the administration of your business. Moreover, you can stress less when you are actually looking to find something.

Let’s establish a system that you can work with. Here are some of the very common yet important steps to enhance your paperwork management from messy to meticulous. 

 

Get the Equipment You Need

Out of the chaos, the last thing you want is to scatter all your documents across the desk just to realize you can’t find what you need to get the work done. So, before you get on to work, ensure you have access to all the requirements. The items include:

  • Shredder
  • File folders
  • Filing cabinet
  • Label maker or labels
  • Safe for important documents

What you require is dependent upon your existing system, organization, and goals. The point is to ensure you’re all set for the task before diving right into it.

 

Create Viability

Consider this your rule of thumb of organizing paper clutter: The lesser you touch a piece of paper, the better. That means you have to come up with a system to file those documents before you start sorting them out.

There are numerous different options  to categorize them:

  • By client or customer
  • By year or specific time frames
  • By category (finances, hiring, legal)
  • By type of document (contracts, invoices, financial statements)

A good filing system should be intuitive. So, if you’re struggling to figure out the approach to tackle this, ask yourself: What would I first search if I were looking for this item in the future?

Whatever system you create for your documents, use the same one for your soft copies (computer files). You will eventually identify the most suitable approach to managing and separating those documents. Your future self will thank you.

 

Begin With One Area at a Time

You probably have documents scattered at a lot of different places. Perhaps there’s your filing cabinet, the growing pile on your desk, your tangled web of computer files, plus all of the important paperwork that’s hanging out in your email inbox.

This can feel overwhelming, so make the process more manageable by starting with one area at a time.

Tackle that filing cabinet first before moving onto the loose papers scattered around your office. Doing so means you’ll conquer this project methodically, avoid missing anything important, and maintain a cohesive system as you move through each of these storage locations.

 

Easy Way Around

If you can’t do it the harder way then do it smartly. Leave everything aside and trust the technology. When I say the word “technology”, I certainly don’t mean software, programs, coding, design, and, etc. 

What I simply trying to say is, look around there are easy things available everywhere like simple mobile apps. For instance, Udhaar app.

 

About Udhaar App?

Udhaar, a simple tool for personal and commercial use. Udhaar app manages credit (Udhaar) with customers and suppliers.

Udhaar app is an online ledger (like an online khata or journal) to note your outstanding debt, and send reminders to customers to improve collection and cash flow. It’s an easy, safe, and reliable app with outstanding features like reporting, multi-language support, data backup, offline mode, and many, many more. 

 

How Small Businesses Succeed?

How businesses succeed

Steve Jobs wanted to start a little computer company in his garage and was dropped out of college to do so. Mark Zuckerberg, a student of Harvard, launched the first iteration of Facebook from his dorm room. 

The fact that every successful entrepreneur’s route to destination looks a bit different, there are universal tactics that can help drive everyone with small ventures on the right track. Here are some of the significant ways to follow when you start your own small business.

 

The Big Idea

It doesn’t matter how small or big your imagination is, the idea must be a game-changer. The ugly truth is, overnight ideas never work. You have to give it some time, some thinking, and some planning. Look at it for a long run, you can’t just push everything you thought last night lying on your bed.

So, have a pretty good idea of what you’re getting into before you implement it. Keeping in mind that it is not a 9-to-5 occupation. You have to work both hard and smart. Keep on learning new things. Nearly half of new businesses liquidate during the first five years, often because the owners don’t focus much on time, expense, and uncertainty involved. 

 

Going Step-by-Step

Your first day should not be the day you inaugurated. Sometimes starting small is part of a bigger plan – you can be a home chef before you become a caterer, or a food truck seller before becoming a restaurateur. It’s better to line up customers before you open doors for them. Personally, I would recommend that if you can work on your business while you still have your job, that’s the best way to go. 

 

This One Should be on Top

Different plans require different investments. Some may require millions while others may not require even a penny. The important thing here is, You must have an accurate idea of what you are doing and what it takes. 

The more the better, line up as many funds as you can. “Things take longer and cost more than anticipated.” is one of Rhonda’s Rules. The first few years of business are usually challenging, you’ll likely face low revenue and high outlays. Cleaning up your credit before you launch can help when in need so you’ll have some credit capacity available on time.

 

Customer Loyalty

Small businesses pay a lot of attention to increasing the customer base and not think about retaining them. The firm advice here is, keep your customers. You will get increasing footfall eventually when the word goes out. Do not cut off with your current clients; stay connected with them by communicating issues, offering discounts, loyalty cards, and so on. Keep your bread and butter fresh and retain your customers if you want to hold on to your business. 

 

Be Friends With Technology

Usually, small businesses try to make their work harder themselves. They always go for the longer route knowing it can waste their time. They run away from technology as if it were a poisonous snake. But, why?

You should know that the same Whatsapp once used to be very difficult for everyone, but now it’s part of our lives. Similarly, we need to make use of friendly technology around us. Once you get a hold of it, technology can do wonders for your business. Just give it a try because there’s a lot to explore. 

Let’s take an example of the Udhaar app for small businesses. Udhaar is an application for both personal and commercial use and helps you manage credit (Udhaar) with customers and suppliers. 

Udhaar app is an online ledger (like an online khata or journal) to record your outstanding debt, and send auto-reminders to customers to fasten Udhaar collection. It’s an easy, safe, and reliable app with amazing features like reporting, multi-language support, data backup, offline mode, and many, many more.